Facebook may lift Iowa's status as technology leader

Apr. 21, 2013

Just north of Interstate 80 and the Altoona water tower pictured far left is the future site of a proposed data center on 34th ave. in Altoona, Iowa. (David Purdy/The Register) / THE DES MOINES REGISTER

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The Altoona data center site plan, known as project Catapult.

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The imminent arrival of one of the world’s highest-profile technology companies in central Iowa has industry leaders changing their status updates to “feeling hopeful.”

Facebook’s future $1 billion data center in Altoona, they say, can show others that Iowa is a technology hub in the Midwest. The center will join others in the state owned by Google and Microsoft, giving the state a technology trio worth boasting about, said Tej Dhawan, a mentor to technology companies in StartupCity Des Moines.

“When someone asks where the first computer was built, they think Silicon Valley,” he said. “They don’t think Iowa State University. But that’s not a story ever lifted. Can you imagine if ‘Welcome to Iowa’ signs said ‘Birthplace of Computers’ instead of ‘Fields of Opportunities?’ ”

The project is expected to be completed primarily in two $500 million phases near Altoona, where leaders have approved a 1.4 million-square-foot facility. Experts say the final price tag on the building could be $1.5 billion by the time the project is complete.

It remains unclear how many jobs will be created by Facebook’s expected arrival, confirmed Friday to The Des Moines Register by two lawmakers who declined to speak publicly. However, industry experts say data centers are generally lightly staffed once up and running.

“It’s not a huge labor pool,” said Bruce Lehrman of Cedar Rapids-based Involta, a data center provider that runs seven centers across the country. “But it affects a lot of people, and they are great jobs.”

The Iowa Economic Development Authority Board and the Altoona City Council are expected to consider incentives for the project Tuesday. Altoona’s council has scheduled a special meeting Tuesday morning that involves an unidentified economic development project and potential contracts.

Facebook runs two other data centers, one in Oregon and one in North Carolina. They have been generally lauded because of their environmental approach and energy efficiency.

Andy Stoll, a Cedar Rapids-based entrepreneur and co-founder of Seed Here Studio, which supports the startup community in the Iowa City-Cedar Rapids region, said this move could mean big things for outsiders’ ideas about Iowa.

“What it speaks to is the infrastructure we have in Iowa to support large technology companies,” he said. “It just continues to improve the growing reputation that the state of Iowa is a place where advanced technology companies are locating.”

Those perceptions might not be the only bonus to having Facebook around.

Google and Microsoft have already contributed to the state’s technology scene, with both companies having employees sit on the Technology Association of Iowa’s board of directors.

Google has reinvested in Council Bluffs and in January expanded the area of the city for which it provides free wireless Internet.

Some say the potential for startups to benefit becomes greater when a mega-company like Facebook joins the community. The big companies often look to absorb new technologies from other businesses, a practice seen in tech-heavy areas like Silicon Valley.

“One of the biggest problems we have here is there are not a lot of big technology companies, other than sales offices,” said Christian Renaud, a mentor at StartupCity Des Moines. “This is going to make it better for the tech community in terms of exits,” such as potential acquisitions of small companies.

Renaud said he doesn’t think much about how people in other states think about Iowa. However, he admitted that having Facebook in Altoona could help state officials and others in Iowa see that the technology community should be considered a big part of the state’s economic future.

“Tech has been an afterthought, compared to biotechnology and advanced manufacturing,” he said. “Now you have big technology companies here — it’s going to raise the influence and make it easier for the tech community in general.”